AICPA Outlines Priorities for Next Phase of COVID-19 Relief Legislation
As the U.S. House of Representatives and Senate return to the nation’s capital for the first time since the end of June, the AICPA has introduced a series of recommendations for lawmakers to consider for the next COVID-19 relief legislative package.
In a July 20 letter to House and Senate leaders, the AICPA outlined support for the following:
- Full deductions for Paycheck Protection Program (PPP) related business expenses – This follows the CPA profession’s earlier support (as well as many state societies that wrote support letters) of the Small Business Expense Protection Act of 2020. Pennsylvania House Bills 2408 and 2497 (both championed by the PICPA) clarify that loans forgiven under the federal PPP are not included in the taxable income for state personal income tax and the Local Tax Enabling Act purposes.
- Additional tools and simplification of the PPP loan forgiveness application, including publicly accessible loan forgiveness calculators
- Removal of tax obstacles to remote work – this also reflects the support of many state societies for the Remote and Mobile Worker Relief Act of 2020
- Allow 501(c)(6) organizations to access PPP loans (the profession has supported this effort from the earliest days of relief legislation)
- Additional federal relief to state and local governments
- Temporary and targeted liability protection for businesses as they reopen
Visit PICPA’s Coronavirus Resource webpage for more updates.
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COVID-19 Recovery and the Philadelphia DOR Webinar
There’s still time to register for the PICPA and Philadelphia Department of Revenue a webinar on July 28. Hear from Frank Breslin, revenue commissioner, Kathleen McColgan, first deputy, and Rebecca Lopez Kriss, deputy, as they discuss the continued impact of COVID-19 on tax filing and payment procedures as the City of Philadelphia begins operating in the green phase.
Register for the webinar here.
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Momentum Builds for COVID-19 Safe Harbor Legislation
State Sen. Lisa Baker (R-Luzerne), chair of the Senate Judiciary Committee, introduced legislation to provide safe harbor liability protections for manufacturers of personal protective equipment, health care institutions and providers treating COVID-19 patients, as well as businesses subjected to exposure lawsuits. Senate Bill 1239 has been referred to Baker’s Judiciary Committee.
“It’s hard to imagine an environment more target rich for litigation,” Baker said in her co-sponsorship memo. “It is also hard to have circumstances less suited to the customary cause-and-effect nature of litigation.”
The Pennsylvania Coalition for Civil Justice Reform (PCCJR), of which PICPA is a member, called for liability protections in the earliest days of the pandemic. The prospect of endless lawsuits threatens Pennsylvania’s recovery. If job creators are under the constant threat of being sued by attorneys looking to place blame for COVID-19 exposure, it will be difficult, if not impossible, to get Pennsylvania's economy restarted.
PCCJR has worked closely with Baker's staff to develop this legislation that addresses in one bill the three major concerns needing safe harbor from COVID-19 related liability.
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Gov. Wolf Signs First Responders Bill, Other Legislation
Gov. Tom Wolf cleared his desk, for the most part, by signing several bills into law this week.
- House Bill 256 strengthens state law to make an assault on a corrections employee at a local, county, or state facility a felony of the second degree. It is a felony of the first degree if a weapon likely to cause serious injury is used. The bill also establishes a third-degree felony if a law enforcement officer or correctional facility employees engages in a sexual act with an inmate or detainee.
- House Bill 943 is intended to improve transparency and reduce prescription drug costs by ensuring that pharmacies and pharmacists inform customers about lower-priced alternatives. The bill prohibits pharmacy benefit managers and pharmacy services administration organizations from restricting these discussions.
- House Bill 632 expands the use of a secure power of attorney for the transfer of vehicles by licensed dealers and insurers including the use of electronic signature and extends the time period during which a limited power of attorney may be used for the sale, purchase, or transfer of manufactured homes during a disaster emergency.
- House Bill 672 amends a 1970 act titled, “An act enabling certain minors to consent to medical, dental and health services, declaring consent unnecessary under certain circumstance.” Specifically, the bill amends provisions relating to consent for voluntary inpatient and outpatient mental health treatment for minors.
- House Bill 732 establishes a local resource manufacturing tax credit and exempts transfers of real estate to or by a volunteer EMS company, volunteer fire company, or volunteer rescue company from real estate transfer tax.
- House Bill 1437 amends the Tax Reform Code of 1971 concerning the City Revitalization and Improvement Zones program and the Rural Jobs and Investment tax credit.
- House Bill 1459 establishes a mental wellness and stress management program for emergency responders who experience post-traumatic stress injuries or traumatic brain injuries on the job.
- House Bill 2455 requires the governor and Department of Health to submit information to the legislature about COVID-19 testing.
- House Bill 2484 increases the cap on the percentage of the value of assets held by or for an electing charity from 7% to 10% for fiscal years 2020, 2021, and 2022. The bill adds a new provision regarding nonjudicial settlement agreements.
- Senate Bill 320 enacts the Revised Uniform Fiduciary Access to Digital Assets Act. It provides for user direction and agreements, disclosure of digital assets and electronic communications, and details the functions of fiduciaries and the compliance and immunity for custodians of digital assets and electronic communications. It also makes conforming amendments.
- Senate Bill 836 requires student athletes and parents to receive information each school year about sudden cardiac arrest and electrocardiogram testing to detect underlying heart conditions. The bill requires students and parents to sign an informational sheet before students participate in athletic activities.
- Senate Bill 927 declares the Pennsylvania Department of Transportation shall independently validate documentation of veteran status and immediately issue a driver’s license or identification card displaying veteran designation without submitting documentation to the Department of Military and Veterans Affairs for review and approval.
- Senate Bill 1125 gives school districts the option during the 2020-2021 school year to extend the real estate property tax discount period, waive penalties for late payments, or both.
- Senate Bill 1188 provides for delegation of taxing powers and restrictions thereon and for tax limitations.
The governor has one remaining bill on his desk from last week’s session, House Bill 2463. Under this bill, a state agency could only deny a request for records for the reasons already authorized under the state’s right-to-know law. The bill is retroactive to Wolf’s March 6 disaster declaration. While the bill passed both chambers of the General Assembly unanimously, Wolf has vowed a veto.
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Lawmakers Propose Closing Amazon Sales Tax Loophole
With small businesses struggling to survive the coronavirus crisis, two Pennsylvania state representatives are proposing a change to the state’s online sales tax law to level the playing field between local businesses and online retailers such as Amazon.
Specifically, the legislation proposed by Reps. Sara Innamorato (D-Allegheny) and Malcolm Kenyatta (D-Philadelphia) would ensure that online retailers collect and remit sales taxes on sales at the point of sale or the location where a customer executes the payment for goods. Currently, Amazon calculates its taxes based on "location of fulfillment," meaning wherever Amazon has a warehouse. This practice excludes two Pennsylvania counties – Philadelphia and Allegheny – which also happen to be the only counties in Pennsylvania that levy a local sales tax on top of the statewide tax.
Both legislators said that as Pennsylvania begins to recover from the global pandemic and its accompanying economic impacts, it is imperative that the legislature work together to create a fairer system to collect state and local taxes, one which does not give large out-of-state corporations an unfair advantage over local retailers. The two lawmakers are currently seeking co-sponsors for their legislation, which they hope to introduce soon.
The PICPA Committee on State Taxation is reviewing the proposed legislation.
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Senators Introduce Bill Ensuring Lebanon Gets CARES Funding
Sen. Pat Browne (R-Lehigh) and Sen. David Arnold (R-Lebanon) introduced legislation to ensure that Lebanon County does not lose out on vital CARES Act funding for its citizens.
“While we are still calling on the governor to reconsider his decision to withhold the $12.8 million from the COVID Relief – County Block Grant program appropriated for Lebanon County, we have introduced legislation that will guarantee that Lebanon County either receives that funding or that it is allowed to offset the amount of realty transfer tax and inheritance tax owed to the Commonwealth, which is collected by the county, by the amount of the funds withheld,” Browne said.
Wolf is withholding the CARES Act relief funds for businesses shut down due to the virus because Lebanon County did not shut down businesses following the governor’s order; thus, the administration argues they are not entitled to relief funds.
Senate Bill 1245 specifically requires the Pennsylvania Department of Community and Economic Development to release Lebanon County’s portion of the COVID Relief – County Block Grant program funding within 10 days of the effective date of this act. Pennsylvania’s CARES Act fiscal code legislation requires the department to distribute the $625 million appropriation to each county on a proportionate population basis no later than July 15, 2020.
This legislation is in addition to a lawsuit filed July 22 by the County of Lebanon against Wolf asking the Commonwealth Court to require the governor to release the $12.8 million in CARES Act funding appropriated for Lebanon County.
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IFO Study Examines COVID-19 Impact on Local Revenues
In response to several requests from state lawmakers, the Independent Fiscal Office (IFO) undertook a study of how the COVID-19 pandemic and mandated business closures could impact local earned income taxes (EIT), property taxes, and gaming revenues received by municipalities, counties, and school districts for the current year.
IFO’s analysis uses two distinct time frames. For municipalities and counties, the analysis makes projections for revenues received during calendar year 2020 because that corresponds to the municipal and county fiscal year. For school districts, the analysis makes projections for school year 2020-2021, which begins July 2020 and ends June 2021.
IFO notes that its analysis excludes other important local revenue sources (such as realty transfer taxes, occupational taxes, and various fees) because it lacks relevant data that could be used to inform projections of those revenues.
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